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IMF Bi-Weekly Briefing

The IMF stands ready to help Zimbabwe restore growth and stability after the ousting of long-time president Robert Mugabe, Fund spokesman Gerry Rice told reporters Thursday (November 30) in Washington.

“Zimbabwe faces severe economic challenges on a number of fronts. So, restoring growth will require concerted efforts to tackle the fiscal deficit, to complement that with structural reforms, and so on,” Rice said.

“We stand ready to support the authorities in their efforts to design policies that can indeed restore stability and growth. And moreover, in addition to a strong and coherent reform program we see a concerted international effort will be required to revive and reintegrate the Zimbabwean economy,” Rice added.

A team of IMF experts will be traveling to Harare next week on a previously scheduled visit to assess the economy of Zimbabwe. The Fund hopes to meet the new cabinet being put in place.

But new money from the IMF can’t be provided under IMF rules until several preconditions are met, including resolving arrears of roughly $2 billion to the World Bank, Africa Development Bank and the EIB.

“An IMF financial arrangement, for example, would only be possible after progress in resolving Zimbabwe's arrears to other international financial institutions and other creditors.”

Rice took an opportunity to set the record straight about the IMF’s position on food subsidies in Tunisia, after some media outlets suggested recent cuts to bread subsidies was done at the urging of the Fund.

“Efforts to reduce the budget deficit and avoid high public debt from an increasing further should focus, we believe, on limiting the growth of the public wage bill; reducing energy subsidiaries; and implementing tax reforms that distribute the burden of adjustment more equally among the population,” Rice said.

“We believe public investment and social spending should be protected.”

And after a week of volatility in Bitcoin pricing, Rice was asked about the IMF’s stance on cryptocurrencies and the need to shape regulations over the sector.

“There's a need for a balanced assessment of crypto currencies. In our view, crypto currencies, including ICOs; including the initial claim offerings should be subject to appropriate regulation and supervision,” said Rice. “A key challenge for country authorities would be to contain risks without stifling the innovation associated with crypto currencies.”